Markets Set To Open Marginally Higher; Iran Proposal and India-New Zealand FTA Lift Spirits 

Mumbai, April 27: Indian markets look set to open up marginally higher on Monday, as India’s Gift Nifty futures suggest a gap-up open and investors find a few reasons to hope after five losing sessions amid two encouraging weekend developments: An Iranian offer over the weekend that could restart nuclear negotiations and reopen the Strait of Hormuz as well as the signing of a historic Free Trade Agreement between India and New Zealand later today.

India’s Gift Nifty futures for the April 28 expiration are trading at 24,133 as of 8: 39 am on Monday, up 11.50 points or 0.05%, indicating a flat-to-positive opening for Nifty 50. Considering the incomplete nature of Sunday’s Iranian offer — however positive it might have been otherwise — it does little to suggest investors will rush back into stocks given the uncertainty that remains in the Middle East.

Two Positive Developments

On Sunday, Axios reported that Iran provided the US a new proposal through Pakistan on restarting nuclear negotiations and reopening the Strait of Hormuz in exchange for ending hostilities — though nuclear talks would only resume in a second phase of negotiations — per an anonymous US official and two other sources familiar with the matter. If true, that would mark Tehran’s first substantial offer on reopening Hormuz, indicating that Iran is ready and willing to divorce nuclear talks from ending the war in the short-term. Still, optimism was short-lived as US President Donald Trump cancelled a planned visit by his special envoys Steve Witkoff and Jared Kushner to Islamabad yesterday while Iranian Foreign Minister Abbas Araqchi travelled to Pakistan, Oman, and Russia last week — and Trump again told reporters on Fox News that Iran “can’t have a nuclear weapon, otherwise there’s no reason to meet.”
Early Monday, positive sentiment continued in India as it was reported that India will sign a historic Free Trade Agreement with New Zealand on Monday that will eliminate tariffs on all Indian exports to New Zealand and sharply reduce or eliminate tariffs on 95% of current imports from New Zealand. Stock markets cheered the news as it points to India accelerating trade ties even as the US ramps up its pressure in oil-producing regions.

Asian Markets

Asian markets finished broadly higher overnight. Japan’s Nikkei rallied 1.45% to 60,584 — its best day in weeks — Shanghai added 0.22%, Hong Kong’s Hang Seng rose 0.09%, Malaysia’s KLCI increased by 0.13% and Indonesia’s JSX was the lone loser, crashing 3.38%. For most of Asia, it was a quiet day.

US Markets

US markets finished higher on Friday despite the Dow Jones slipping lower. The Nasdaq jumped 1.63% to 24,836 and the S&P 500 gained 0.80% to 7,165 but the Dow Jones dropped 0.16% to 49,230. Investors may see some of that positivity come into Asia as well today.

Oil Prices

Oil prices continued to climb higher overnight as Brent crude surged 2.05% to $107.49 a barrel — its highest price since April 7 — while West Texas Intermediate oil increased by 1.88% to $96.17. The talks between the US and Iran remain deadlocked for now and tanker traffic through the Strait of Hormuz has come to a near-complete standstill. IG market strategist Tony Sycamore said on Sunday that “the clock is now ticking loudly” on Iran as its storage capacity could be depleted soon, forcing Tehran to cut production from its aging oil fields. “That could actually end up helping matters,” he added, referring to the possible acceleration of a diplomatic outcome.

Indian markets closed sharply lower on Friday after slumping in the final hour of trade. The SENSEX lost 999.79 points or 1.29% to finish at 76,664.21 — its worst performance of the week — while the Nifty 50 shed 275.10 points or 1.14% to 23,897.95, falling below the 24,000-point mark for the first time in weeks as surging crude prices, ongoing weakness in IT stocks, and uncertainty surrounding Iran weighed heavily on investor sentiment. 

Source:

• nseindia.com